How do blender units and meters, feet, or yards correlate?
Blender units
The Blender units system is a decimal unit system that can be whatever you want it to be. By default, it's implicitly considered meters. If you go to the scene tab in the properties panel, then to the gravity section, you can see that the rate of acceleration due to gravity is (0.000, 0.000, -9.810). 9.810 is the rate of acceleration in meters per second squared. So as you can see, it's implicitly considered meters. Now, if you change this value to -.0981 and every rigidbody's mass to 1⁄100 of what it was, you would now be working in centimeters and grams (or the cgs system).
Metric units
First off, let me start by defining a list of metric measurements that Blender uses.
Length

(km) kilometer [1000 meters]
(m) meter
(cm) centimeter [1⁄100 meter]
(mm) millimeters [1⁄1000 meter]
(µm) micrometers [1⁄100000000 meter]

Mass

(ton) metric ton [1000 kilograms]
(kg) kilogram
(g) gram [1⁄1000 kilogram]

If you go to the units section in the scene tab, you can see that there are three different options (&quot;None, Metric, Imperial&quot;). &quot;None&quot; is Blender units. If you select metric units, Blender will explicitly use metric units. Check back in the physics panel, and you'll now see (0m/s2, 0m/s2, -9.81m/s2).
For another example, select a mesh and hit n in the scene view to bring up the properties panel, go to the transform section and then dimensions. If you change one of the x, y, or z dimensions to a large number, you will see that it now uses the kilometers instead of meters. And if you change it to a ridiculously small number, like .000002, it will use micrometers.
Imperial units
Imperial units are the worst to work with. Also known as the British units. This is what backward America uses. Let me again define the units that Blender utilizes.
Length

(mi) mile [5280 feet]
(ft) foot [also symbolized with a single quote: ']
(in) inch [1⁄12 foot] [also symbolized with double quote: &quot;]
thou or mil [1⁄12000 foot]

Mass (technically weight)

ton [2000 pounds]
(lb) pound
(oz) ounce [1⁄16 pound]


Separate units
If you are using metric or imperial units, you can use the 'separate units' checkbox which makes Blender separate out a unit of measurement into two separate units of measurement of the same system.
For example, without 'separate units' toggled, a field might display something like 2.538m. But with 'separate units' toggled, it would display 2m 53.8cm
Scripting
One thing you should note is that when working with scripts, and you use a function like bpy.ops.mesh.primitive_cube_add(location=(1.0, 1.5, 2.0)), which creates and positions a cube, the values are in Blender units even if you are working in metric or imperial. So this function, when using the imperial system, would place a cube at (3.281', 4.921', 6.562') or  (3' 3.37&quot;, 4' 11.1&quot;, 6' 6.74&quot;) with separate units.